Ag processing joins forces to tackle issues like energy

SKYROCKETING energy costs, and a lack of security of supply, will be the first battle front for a newly-formed alliance of agricultural manufacturers.

The first of its kind, the Australian Agricultural Manufacturers’ Alliance (AAMA), takes in red meat, dairy, sugar, poultry, stock feed, renderers, cotton and oilseeds, and is about pooling resources and influence to get the wheels turning on the most pressing challenges.

The driving force has been the red meat processing peak lobby group, whose chief executive officer Patrick Hutchinson says agricultural manufacturers directly support 100,000 jobs in Australia and if you take in the multiplier effect across the supply chain that spreads out to 300,000 jobs.

AAMA members saw the opportunity to have industry, government and communities recognise - when they sit down to a breakfast of chops and bacon, eggs, toast, sugar and milk in their tea whilst wearing cotton PJs - that there was more to agriculture that the production sector, he said.

The aim is to reach out to governments on key issues, that in turn would assist farmers if progressed, he said.

Agricultural lobbying needed to move into the space of advocating for the entire supply chain, he said.

Energy is the obvious first issue to tackle, with massive hikes in the cost of gas and electricity putting huge pressure on the ability of processors across many ag sectors to remain profitable.

In beef, abattoir bosses are reporting increased energy costs year-on-year to the tune of 100 per cent, or in excess of a million dollars.

Executive director of the Australian Dairy Products Federation, Peter Stahle, said costs were set to rise 50 to 70 per cent in 2017/18, or an additional $100 million, in his sector.

Cotton ginners were paying 15.5 cents per kilowatt hour in 2015 and this year that has risen to 19c.

Andrew Vanderstok, from the Australian Cotton Ginners Association, said an individual site, for example, could have a power bill of as much as $160,000 a month.

AAMA will be pushing for bipartisan agreement for the Turnbull Government’s national energy guarantee, a policy designed to guide electricity generators into investments that curb retail prices.

Other solutions the group is seeking include a greater understanding of the impact of lack of planning permissions regarding the construction and implementation of interventions in energy management, such as solar plants, especially in metropolitan areas where some members have facilities.

“Finally, the Alliance is clear that more needs to be done to assist rural and regional businesses in brokering deals with energy companies when there is a lack of competition, as well as dealing with the increasing amount of brokers in the market,” Mr Hutchinson said.

Other prioritised challenges include road infrastructure, regulatory burden, water issues and terms of trade.

AMIC chair Lachie Hart said where livestock was concerned, priority corridors identification had been very much a mining industry focussed policy by governments but the opportunity now presented to readdress that focus.

On terms of trade, governments were doing a great job on bilateral and multilateral negotiations for ag industries but there was significant scope for improvement in the area of non-tariff barriers, he said.